Recent royalty acquisitions lower Franco-Nevada headline earnings
TORONTO (miningweekly.com) – Precious metals royalty and streaming firm Franco-Nevada has reported lower adjusted profit for the three months ended March 31, as higher depletion and costs of sales related to its recent royalty acquisitions, such as at Candelaria, Sabodala and Fire Creek, were only partially offset by lower income tax expense and higher revenue.
Adjusted net income for the first quarter was $22.9-million, or $0.15 a share, down 35% year-on-year compared with $35.4-million, or $0.24 a share, for the same period a year earlier. Wall Street analysts had, on average, expected earnings of $0.18 a share on revenue of $112.6-million.
Net earnings for the period fell 46% to $19.2-million, or $0.12 a share, compared with $35.4-million, or $0.24 a share, for the same period in 2014.
Despite missing analyst forecasts, revenues rose 4% year-on-year to $109.2-million, on the back of a 29% increase in gold-equivalent output to 85 081 oz. The improved output was underpinned by the company’s new Candelaria asset, operated and owned by Lundin Mining, having a strong first quarter.
Lower average oil prices also impacted the company’s revenue streams.
Franco-Nevada remained debt free with $671.3-million in working capital at quarter end. After bagging significant royalty rights on diverse prospects during recent months, the company expected to continue to grow its portfolio with further investments.
The company had declared a quarterly dividend of $0.21 a share, up 5% from the previous $0.20-a-share dividend, marking the eighth consecutive yearly dividend increase for Franco-Nevada shareholders.
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